How to keep your Arizona Nonprofit compliant?
Keeping track of all the state and federal non-profit compliance filings can be a daunting task if you are doing it all by yourself. The nonprofit formation process involves a lot more than applying for 501(c) (3) status. Before filing an application for 501(c) (3) status, you will need to submit a number of other documents. If you do not submit proper documents within set time periods, you risk losing your non-profit corporate status and tax privileges. Our expert team of certified legal document preparers is here to help you get your nonprofit off the ground fast and easy and to help keep it compliant with all the nonprofit regulatory compliance requirements post-incorporation.
Get familiar with the key documents in non-profit formation and compliance in Arizona. In this easy-to-follow 12-step guide, we will walk you through the essential documents needed to form a nonprofit 501c3 corporation in Arizona.
Pre-incorporation nonprofit compliance requirements are a five-fold process.
- Name Search.
Your nonprofit corporate must be assigned a distinguishable name that does not conflict with the names of other registered corporations in the state. The nonprofit corporate name must comply with the requirements in A.R.S. §§ 10-3401, 10-3202, and 10-11506.
- Appoint an incorporator and directors.
Arizona’s statutes require to appoint at least one initial director. But to apply for 501c3 status, a minimum of three directors should be appointed.
- Appoint a registered agent.
The registered agent known as a statutory agent in Arizona must be an individual or entity physically located in Arizona that is responsible for accepting legal documents on behalf of the non-profit. Smaller non-profits typically appoint a director or an officer as their registered agent.
- File Arizona non-profit articles of incorporation.
Every nonprofit corporation is required to file its articles of incorporation with the Arizona Corporation Commission. This can be done in person, online or by mail. Articles of incorporation is the primary corporate document of your non-profit organization. A non-profit officially comes into existence when Articles of incorporation are filed along with a cover sheet, statutory agent acceptance form, and certificate of disclosure. To qualify for tax-exempt status, the wording and contents of the articles of incorporation- non-profit form CF0041 must be drafted in the manner set forth in A.R.S. §§ 10-3202 in compliance with certain State and IRS requirements. An articles of incorporation generally contain the non-profit’s name, the character of affairs, purpose, the initial board of directors, registered agent, and restrictions of the non-profit’s activities.
- Publish notice of incorporation.
Unless your non-profit is in Maricopa or Pima County, it will be required to publish articles of incorporation within 60 days and notice must appear in three consecutive publications of a newspaper of general circulation in the relevant county.
There are a number of additional compliance requirements post- incorporation.
- Create corporate bylaws for your non-profit organization.
Before filing articles of incorporation, the rules and regulations of your organization governing the holding of meetings, the quorum, electing of directors and officers, and other corporate formalities should be decided. Bylaws are the second most important document after articles of incorporation. They act as an operational manual for your non-profit. However, the bylaws of your non-profit organization need not be filed with the state corporate filing office. In the event state nonprofit laws conflict with the bylaws of your corporation, the former prevails. When your non-profit applies to IRS for 501 (c) 3 exemption, they will require you to submit both bylaws and conflict of interest policies.
- Hold the organizational meeting of the board.
Sections 10-3205 and 10-3206 require the holding of the first board meeting also referred to as the organizational meeting of the board. At the initial meeting of the board, bylaws, conflict of interest policies and resolutions will be adopted, and officers, directors, and committees will be appointed. The minutes of the first board meeting and all future meetings must be documented.
- Obtain an Employer Identification Number.
All non-profit organizations whether they hire employees or not must obtain a federal EIN, a nine-digit number assigned by Internal Revenue Services. This identification number is used when opening a bank account or submitting your application for 501c3 status. No filing fee is charged when obtaining the EIN number.
- Apply for all applicable Arizona State business licenses and permits.
Depending on the locality and the industry, your nonprofit may need to apply for local/state business licenses and permits. Check the Arizona department of commerce licensing guide for state license information. Check with the clerk of your city or town to obtain information about local licenses.
- File annual report.
According to Arizona revised statutes section, 10-1622 all corporations including nonprofit corporations in Arizona are required to file an annual report indicating their financial position before Internal Revenue Service and Arizona Corporation Commission.
- Get federal and state tax identification numbers.
Employer Identification Number is your deferral tax ID number. To get a state tax account for your non-profit, you will need to apply to the Arizona Department of Revenue for each applicable tax account. There is no consolidated state tax registration application in Arizona.
- File for 501 (c) 3 status (federal tax-exempt status).
Getting tax-exempt status is a critical step in the non-profit formation process. To become a tax-exempt charity, your non-profit should acquire 501 c 3 status. IRS Form 1023 (Application for Recognition of Exemption Under section 501 (c) 3 of the Internal Revenue Code must be filed with the IRS within 27 months of the filing of articles of incorporation to obtain federal tax exemption. Smaller nonprofits with less than $50 000 annual gross receipts and $250 000 worth of assets are eligible to complete online the shorter streamlined form (Form 1023 EZ Streamlined Application for Recognition of Exemption under section 501 (c) 3 of the Internal Revenue Code). If your non-profit receives an IRS determination letter you get federal tax-exempt status, and you will be automatically exempt from state income tax.
Should you register your nonprofit for charitable fundraising?
Unlike other states, Arizona has no fundraising registration requirements. As of September 13, 2013 non-profits no longer need a charitable solicitation registration license to fundraise in the state.
Forming an Arizona non-profit is complex. DPA compliance team makes it easier!
At Document Prep Arizona, we prepare state and IRS filings for your non-profit. Our compliance team has a proven track record in forming nonprofits across Arizona with a 100% success rate. To learn more about forming a nonprofit in Arizona and what you should do to keep your nonprofit compliant, feel free to call us at 888.362.0036.